Landmark ruling in India treats XRP as property, not speculation

A Madras High Court judge barred WazirX from reallocating a customer’s XRP holdings and declared cryptocurrency qualifies as property under Indian law, setting a precedent that may reshape how exchanges handle user assets during insolvency proceedings across multiple jurisdictions.

As The Times of India reported on Oct. 25, Justice N Anand Venkatesh ruled that the entity operating WazirX cannot redistribute, apportion, or reallocate 3,532.30 XRP coins belonging to Rhutikumari, who purchased the assets by transferring funds from her Chennai bank account.

The court granted an interim injunction after finding jurisdiction, despite WazirX’s argument that a Singapore High Court-supervised restructuring scheme controlled the matter.

Justice Venkatesh stated:

“Cryptocurrency is treated as a virtual digital asset, and it is not treated as a speculative transaction.”

The ruling cited Section 2(47A) of the Income Tax Act, which governs virtual digital assets, and found that cryptocurrency “is capable of being enjoyed and possessed (in a beneficial form) and is capable of being held in trust.”

WazirX contended that the platform does not own crypto wallets and that all users would receive pro rata compensation through a three-step process supervised by Singapore’s high court following a hack that halted withdrawals.

The exchange argued that the Madras High Court lacked jurisdiction because the arbitration was seated in Singapore.

The court rejected that position. Justice Venkatesh noted that Rhutikumari transferred funds from India, accessed the platform from within the country, and therefore established that part of the cause of action arose within the Madras High Court’s territorial jurisdiction.

The decision treats crypto holdings as distinct property rights rather than unsecured claims in a bankruptcy pool.